AIG has become the poster child for the financial bailout. Public outrage over the financial mess came to a head after it was revealed that $165 million would be paid out in bonuses to AIG employees as a retention strategy. The main focus from the White House was on the financial products division that was largely responsible for the bad bets insuring mortgage-backed securities. This bonus is only a drop in the bucket considering the $170 billion in bailout money approved by Congress and is only part of AIG’s company-wide retention and bonus strategy totalling $1.2 billion. A strategy AIG says is necessary to keep the “best and brightest” and remain competitive in a dog eat dog industry. Edward Liddy is now back peddling from earlier statements that AIG was contractually obligated to fulfill the bonuses by asking employees to return most of the money after being lambasted by Congress. President Obama pressed the issue with US Treasury Secretary Timothy Geithner by asking him “to fully review all additional measures at [his] disposal to recoup these bonuses and to recover funds on behalf of taxpayers.”
AIG is Cannon Fodder for Bloggers
Trending data from Nielsen BuzzMetrics shows blog posts about AIG making a huge rally over the last several days and peaking on March 18th at 0.803% of all blog posts or 4,289 posts related to AIG when Edward Liddy was on Capitol Hill to give testimony in front of Congress. Catch the latest Big Buzz on AIG from around the web.
The Twitscape and The Tweetstorm
Twitter has become the ultimate echo chamber where ideas, latest happenings, and frustrations are shared for everyone to reply (@), retweet (RT), and short link too. Bonuses, outrage, and the bailout hearings seemed to be on everyone’s mind on Wednesday. Here’s a visualization courtesy of StreamGraph showing the terms most associated with AIG on March 18th.
The American people now effectively control 80% of AIG. The company will have to balance running a business while answering to many angry de facto shareholders and increasing governmental pressure. This arranged marriage may not have been the greatest deal considering the dowry put down by taxpayers and the sign of infidelity AIG is showing. Dubbed to stand for arrogance, incompetence, and greed by one senator, AIG has become the face of Wall Street’s creation of two financial trading worlds. One, where regular investors plan for the long-term using their 401(k) and another, where Wall Street traders bet the future of regular investors for short-term gains. For many onlookers, the bonuses are outrageous and represent everything that is wrong with the industry. After all, as Stephen Colbert says, “It is [the money] supposed to be used responsibly. In ways we never see to prop up businesses we don’t understand.” Chew on this explanation from the Business Insider.
